Market benchmark BSE Sensex closed lower by 131 points or 0.44 per cent in volatile trade on Friday, cutting short its three-day winning run due to deepening growth concerns and a less-than-expected moratorium on loans announced by the RBI in its monetary policy.
Stock markets had rallied around 4 per cent in opening trade in line with firm global markets and ahead of the RBI governor’s address.
However, stocks lost steam after the policy announcement with the benchmark indices paring sharp gains. The 30-share Sensex ended 131.18 points or 0.44 per cent lower at 29,815.59. It hit a high of 31,126.03 and a low of 29,346.99 in day trade.
The broad-based NSE Nifty managed to end with gains, closing higher by 18.80 points or 0.22 per cent at 8,660.25 as energy, FMCG and select banking stocks advanced.
On a weekly basis, both the indices closed in the red, marking their sixth week of losses due to heavy selling after lockdowns in major economies to contain coronavirus spread.
“In such uncertain times, instead of fresh funds entities want to save their skin, RBI’s relaxation of only 3 months instead of 6 months for a moratorium on interest on loans and working capital has disappointed many,” Jimeet Modi, Founder and CEO, Samco Securities said.
In a bid to support the economy during the pandemic, RBI Governor Shaktikanta Das unveiled a slew of measures, including its steepest interest rate cuts in more than 11 years. The repo has been cut by 75 basis points to 4.4 per cent — the lowest in at least 15 years.
Further, the Reserve Bank reduced the cash reserve ratio (CRR) for all banks by 100 basis points to 3 per cent to release Rs 1.37 lakh crore across the banking system. It also allowed banks to put on hold monthly instalment payments on all term loans for three months.
The RBI is playing every card in its pocket to prevent a crisis-like situation by giving banks the ability to lend more, but as such no direct helping hand has been given to ailing industries as of now, Modi observed.
Axis Bank, ITC, NTPC and M&M were among the top gainers. Sector-wise, BSE bankex, metal, power, IT and healthcare indices ended on a positive note while BSE telecom, auto, oil and gas, basic materials and realty indices ended in the red.
